Only an eagle-eyed observer can spot what makes the Mantis aircraft so special, because visitors are kept at a distance lest they rumble its technological secrets. But the main giveaway is the label on the cockpit: "No human occupant."

The drones that have taken airborne warfare to a clinically impersonal level are the forebears of this unmanned aircraft, which is capable of flying reconnaissance missions with an unprecedented degree of independence. There will be no pilot on the ground flying the Mantis with a joystick: just a set of pre-programmed aims, such as scouring Pakistan's vast northern borderlands for terrorist camps.

"They are great for dull, dirty and dangerous operations," says Martin Rowe-Willcocks, an executive in the unmanned flight division at BAE Systems, maker of the Mantis and Britain's largest defence company.

The Mantis is perhaps a slightly unremarkable-looking glimpse into the future, with its brown colour scheme and conventional-looking design, but a weaponised cousin, called the Taranis, is a rather more arresting sight. Or at least that's the impression given by the poster in the room next door at BAE's sprawling manufacturing site in Warton, Lancashire. Resembling an ultra-sleek stealth bomber, it is hidden away somewhere in the building. These unmanned prototypes carry the long-term export hopes of a UK defence industry that needs to trade its way out of trouble and is losing jobs in the wake of government spending cuts.

David Cameron pointed the way last week, when he took British defence executives on his tour to south-east Asia. On one leg of the visit he called for greater co-operation between the British and Indonesian armed forces and defence industries. Defence employs 110,000 people directly in the UK, which is the world's third-largest buyer of defence equipment behind the US and China. Domestic deals accounted for more than half of the defence industry's £22bn sales in 2010, which makes the search for exports all the more pressing.

Although the Warton hangar proves that artificially intelligent planes are far from an abstract concept, a mass-produced breakthrough is years away, because Taranis and Mantis are prototypes only. For now, BAE and its peers must sell their less futuristic products into a domestic market stifled by coalition austerity or into export markets that are also suffering from spending cuts.

Expanding markets, particularly in the Middle East and Asia, are swamped by competitors also looking for an escape from their domestic troubles. In an example of this scramble, the Indian government has chosen the Rafale fighter made by France's Dassault over BAE's Typhoon as the frontrunner for a $10bn (£6.3bn) jet contract, with the French making a cheaper bid. BAE and its partners in the Eurofighter Typhoon consortium have not given up on the deal, but they are in second place.

A few hundred yards from the pilotless-plane hangar, the head of BAE's military aerospace unit sits in an office that reminds visitors of the past rather than the future, decorated as it is with images of the Spitfires and Lancaster bombers made by BAE's predecessors. Making Typhoons is Warton's main business and aircraft are the cornerstone of the whole industry – aerospace accounts for around 55% of UK sales.

Chris Boardman, managing director of BAE's military air and information business, admits that the government's strategic defence and security review was "obviously devastating from our perspective and from the employees' perspective". Under the review, the £37bn UK defence budget will be reduced by 8% by 2014, and BAE workers have felt the impact. BAE is cutting 2,000 jobs from its aerospace operations, including 900 at Brough in Yorkshire, while a further 1,500 are under threat at its Portsmouth shipbuilding operations. AgustaWestland, the Italian-owned helicopter maker, is cutting 375 jobs in Britain.

In a hall next door to Boardman's office, Typhoons are assembled in a low-key atmosphere of diligent scrutiny that appears to be the signature ambience of advanced manufacturing. The RAF is the main client for the aircraft, although one of the nearly completed models is destined for Saudi Arabia. Explaining the relatively serene environment, a BAE employee says there is no need for riveting if you are putting together a carbon fibre fuselage, which just slots together. Precision is also a prerequisite. The design allows for only 1mm of deviation across the whole aircraft and the alignment of parts is scrutinised by lasers.

For BAE, AgustaWestland and other defence manufacturers it is the likes of Saudi Arabia, concerned by the ambitions of Iran and flush with petrodollars to counter them, that will grow in importance as UK spending shrinks. "There are lots of aircraft here ready for the RAF but if we did just that we would be running out of work in the next couple of years. So we have to be successful elsewhere," says Boardman. BAE is hoping to secure a Typhoon order from Oman, as well as a deal to build a maintenance facility in Saudi Arabia – a major Typhoon customer.

But the Typhoon still needs government backing, says Boardman, who explains how all defence manufacturers require the support of their home state. "You have to have your government promoting you. The best example would be Margaret Thatcher in Saudi Arabia. She made it clear that there had to be a strategic relationship with the kingdom on Saudi Arabia, and from that you get export sales," he said, referring to a process that included the controversial al-Yamamah arms deal. It brought BAE more than £40bn of revenue, as well as a Serious Fraud Office investigation that ended abruptly under government orders in 2006.

For any defence firm, the domestic market is vital, says Boardman. "Those nations who are interested in what you have got need to see your government continually investing in that aircraft or ship and its maintenance."

Boardman is more optimistic than many of his peers, who feel the government is removing support for one of the UK's biggest manufacturing sectors despite calling for a "march of the makers" to boost industry.

The official defence industry view is gloomy. Robin Southwell, president of ADS, the trade body for the aerospace, defence, security and space industries in the UK, says defence is a "pretty worried" sector. "We are an industry that is flatlining at best," he says. The exhortation to export, underlined by George Osborne's call in last month's budget for industry to double exports to £1 trillion by 2020, also concerns him. "The trouble is, everybody is exporting," says Southwell. With manufacturing in economic and political vogue, Southwell argues that defence should be a showcase for industry: "We are a proven engine room for growth in this nation, we provide a window into Britain's engineering excellence."

But government support is insufficient, ADS says. The phrase "off the shelf" has alarmed British defence firms in recent months. In its white paper on defence procurement published in February, the Ministry of Defence says it will meet the country's defence and security needs through "open competition in the domestic and global market, buying off the shelf where appropriate". What this means is that only in exceptional circumstances will British firms receive preferential treatment.

Southwell, who is also chief executive of the UK operations at EADS, the European defence and aerospace group, argues that UK defence manufacturers need British government contracts to develop products. Foreign states want to see that UK manufacturers, and their products, are trusted by their domestic government before they buy them. Southwell draws comparisons with the car industry, a powerful exporter in the UK whose domestic market was underpinned by a scrappage scheme during the depths of the recession.

"The car industry is a good example of a joined-up strategy where they have a domestic supply side sorted. Defence does not have a supply-side strategy other than a limited area where there is a direct sovereign capability needed." Eight out of 10 cars made in the UK are exported, but for defence manufacturers the domestic market is all-important.

"The difference within our industry is that generally you only have one buyer in the UK. Someone will buy a Toyota Yaris anywhere in the world irrespective of whether someone buys it in the UK. A buyer of a Yaris in Sheffield will have no influence on a buyer in Singapore." For defence, it is the opposite, says Southwell. "If the UK army is not using a piece of [British-made] defence equipment, then the chances of a foreign buyer taking it diminish rapidly."

Alberto de Benedictis, chief executive of the UK operations of Finmeccanica, AgustaWestland's owner, says the UK defence industry is at a crossroads. "Its future will very much depend on how the MoD manages its acquisition plans and policy in the coming years. If an off-the-shelf procurement policy became a policy to acquire offshore it would obviously be detrimental to the future of the British defence industry."

A further glimpse of the future is provided a few miles up the road from Warton, at another BAE site in Samlesbury. Fuselage and tail pieces are being manufactured for the F-35 fighter, a US-government led project that the UK government is set to buy. After that, it will be the era of Mantis and Taranis-type vehicles. And that too will be collaborative. Following the Anglo-French defence pact, Dassault and BAE are putting their differences over the Indian market to one side and co-operating on building an unmanned aircraft that will follow Mantis. Those dull, dirty and dangerous missions will not be carried out alone after all.